Operating income % Total assets (investment base) Return on investment Residual Income (8% cost of capital) A. Determine the operating Income (loss) Current Year Operating income (loss) $ B. Determine the operating income (loss) Current Year Operating income (loss) Return on investment Unsuccessful ✓ Residual income $ % % $4,500 ? ? ? (dollars) for each year. If required round final answers to two decimal places. Prior Year c. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the return on investment. Was the decision to invest additional assets in the company successful? If required round final answers to two decimal places. Current Year Prior Year ? $1,400 (percentage) for each year. If required round final answers to two decimal places. Prior Year % % D. Assuming an 8% cost of capital, calculate the residual income for each year. Do not round intermediate computations and round final answers to nearest whole dollar. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Current Year Prior Year
Operating income % Total assets (investment base) Return on investment Residual Income (8% cost of capital) A. Determine the operating Income (loss) Current Year Operating income (loss) $ B. Determine the operating income (loss) Current Year Operating income (loss) Return on investment Unsuccessful ✓ Residual income $ % % $4,500 ? ? ? (dollars) for each year. If required round final answers to two decimal places. Prior Year c. The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the return on investment. Was the decision to invest additional assets in the company successful? If required round final answers to two decimal places. Current Year Prior Year ? $1,400 (percentage) for each year. If required round final answers to two decimal places. Prior Year % % D. Assuming an 8% cost of capital, calculate the residual income for each year. Do not round intermediate computations and round final answers to nearest whole dollar. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Current Year Prior Year
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 3PA: The income statement comparison for Forklift Material Handling shows the income statement for the...
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